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Point 5- The new economy, sMEs are small and medium-sized enterprises.…
Point 5- The new economy
The financial economy
In the new economy, sales of financial products have
increased and are higher than ever.
Financial capital is essential in funding the real economy, since many companies rely on investment to carry out their economic activity.
Financial activities generate more profits than those involved in the production, distribution and consumption of goods and services. However, they can also create serious imbalances that affect the entire economy.
The world’s 12 most important financial markets are: New York, London, Tokyo, Shanghai, Hong Kong, Paris, Shenzhen, Toronto, Frankfurt, Bombay, Sydney and Zürich.
Renewable energies
Renewable energies renewable energies are the only possible alternative to oil, as they will never run out.
• Biomass: the production of certain fuels (ethanol,
methane gas, etc.) by fermenting organic matter.
• Geothermal energy: this uses the heat inside the Earth to produce electricity.
• Hydroelectric energy: this is generated by the energy produced by water falling from dams and rivers, and by tides.
• Wind, or aeolic, energy: uses the wind to move large wind turbines, producing electricity. Wind farms are also set up at sea.
• Solar energy: solar radiation generates electricity using photovoltaic solar panels. As electricity is only produced during the day, storage systems have been
invented to make it available for use, night or day.
The service industry
Employment in the service industry continues to grow around the world, while industrial employment now
represents a smaller proportion of jobs.
With the fragmentation of production processes, large factories have given way to smaller centres of production. Many tasks associated with manufacturing a product are subcontracted to other, smaller companies, which bring down costs by competing amongst themselves.
The result is that the number of small services companies (distribution, promotion companies, design, etc.) is increasing at a local level, while
industrial activity is now generally concentrated in large companies.
Innovation and creativity
To be more competitive, companies in the most developed countries focus on creating innovative products whose new features set them apart in the
market and attract customers.
This strategy relies upon the creativity and talent of millions of professionals. In terms of economic geography, creative industries have certain characteristics:
• They give products added value.
• They help create higher-quality jobs.
• They tend to be geographically concentrated in certain spaces.
sMEs are small and medium-sized enterprises. These are businesses with fewer than 250 employees and less than €50 million in annual turnover.